Feds open way to NYC congestion tax

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Kai Ryssdal: The Bush Administration has given a very big green light to the idea of making Americans pay extra to drive in congested areas. Today, the Department of Transportation offered New York City $354 million. The money would foot the bill for Mayor Michael Bloomberg's proposal to charge a special fee for cars and trucks entering the busiest areas of Manhattan.

Supporters are selling it not just as a way to reduce traffic and air pollution. They say it'll support the economy, too. Here's Marketplace's Bob Moon.

Bob Moon: If New York City had an "official sound," this would have to be it:

[Sound of car horns honking]

The city's average commuter wastes around 49 hours in gridlock every year, according to Transportation Secretary Mary Peters.

Her department's funding offer gives Mayor Bloomberg some powerful leverage in trying to convince New York's city council and the state legislature to implement the plan. He'd charge up to $8 for cars, $15 for trucks during peak weekday hours.

New York must meet certain traffic targets to get the federal money. Congestion pricing isn't a requirement, but Secretary Peters says she wants real reductions.

Mary Peters: Unlike building new roads, this plan can be implemented quickly, and will have almost an immediate impact on traffic.

Peters complains congestion in the nation's cities has kept on rising, right along with transportation spending. The Big Apple's leading business group says there are hidden costs as well.

Kathryn Wylde heads the Partnership for New York City:

Kathryn Wylde: We found more than $13 billion a year are lost from our economy because of traffic congestion. More than 50,000 jobs that aren't created every year.

Opponents argue the toll is a regressive tax that will hurt small businesses and fall most heavily on the poor.

Walter McCaffrey has been coordinating the opposition. He wonders if the federal push for the idea will stop at the Hudson River.

Walter McCaffrey: Having been a member of the New York City council for 16 years, we always liked to think of ourselves as being the trendsetters. But this would be something that would be a very bad trend to set for the country.

McAffrey also cites privacy concerns, calling the program a "vehicle surveillance plan.